Most states have legislation requiring notification in the event of a cyber/data breach involving personal information which increases the liability for companies and their directors and officers. The insurance industry is developing new coverages as new threats from this exposure are found.
Some of the coverages on these policies include the following;

  • Privacy Liability / Pays for a loss from an unintentional disclosure of non-public personal or confidential information in any format. In addition it covers against a violation for any privacy regulations including the HITECH Act, HIPPA, GBLA and Massachusetts 201 CRM 17 or the failure to comply with a company’s own privacy policy.
    Network Security Liability / Pays for a loss arising out of the failure of network security, denial of service attacks and transmission of malicious code.
  • Network and Data Extortion / Pays for any extortion expense and reward paid by the company as the result of an act of extortion.
  • Privacy Breach Expense / Pays for legal services to create a breach response plan and numerous other expenses such as credit monitoring.
  • Internet Media Liability / Pays for a loss from copyright, title or trademark and invasion of privacy on the company’s website.• Regulatory Fines and Proceeding Coverage / Pays for the cost incurred to respond to a regulatory proceeding and reimburses for regulatory civil money penalties where insurable by law.
  • Business Interruption Income Loss / Pays for a business interruption income loss and extra expense incurred as the direct result of a network security incident.
  • Digital Asset Expenses / Pays the expenses incurred to replace or restore electronic data, software, and other electronically stored files that become corrupted or deleted from a network breach.

Liability limits may go as high as five million dollars and these policies are generally written on an annual basis. Be sure to review the policy as there is no true industry standard for this coverage and many carriers add bells and whistles to them. Other exposures also exists such as phishing or willful separations. Be sure to review all of your options with your insurance agent.
If you would like more information or an indication please reach out to us.


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